Fake mobile phones are a $6bn market, says MMF

Pile of cellphonesThe counterfeit mobile phone market is hard to quantify but could be as much as $6bn a year, according to a new report from the Mobile Manufacturers Forum.

The MMF - an international association of telecommunications equipment manufacturers - estimates that around 148 million counterfeit or substandard mobile devices were sold through 'visible retail sites' last year, with many more changing hands via the Internet and local black markets.

The white paper suggest that governments "do not yet fully understand the scope and nature of the problem" and sets out to describe the impact of the illicit trade on consumers, governments themselves and private industry.

In emerging markets the proportion of fakes is particularly high - for example it is estimated at around 20 per cent in India  - and a number of governments around the world including Kenya, Uganda and Zambia have been taking steps to disconnect phones with fake IMEI numbers from networks.

Consumers face health risks from high levels of hazardous substances such as lead in some black market handsets - as well as potential safety issues associated with low-quality components that could pose a fire risk or other hazard. 

Studies have suggested some counterfeit or substandard phones can contain 35-40 times higher levels of lead than limits allow, generally work poorly and cause interference with networks, and place the at risk of data and identity theft.

"There have been reports of fraudulent applications which, when downloaded, collect and send your sensitive and personal data to criminal gangs," commented MMF secretary general Michael Milligan.

The white paper also suggests that in India for example the high level of illicit handsets costs industry $1.5bn in lost sales and the government $85m and $460m in direct and indirect tax losses, respectively.

Consumers can be on the lookout for counterfeit phones by checking its IMEI number, as counterfeits often have duplicated or invalid numbers, as well as unusually low prices, poor build quality and no warranty. More information is available on the industry-sponsored website.

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